Correlation Between Sahamitr Pressure and United Paper

Can any of the company-specific risk be diversified away by investing in both Sahamitr Pressure and United Paper at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Sahamitr Pressure and United Paper into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sahamitr Pressure Container and United Paper Public, you can compare the effects of market volatilities on Sahamitr Pressure and United Paper and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Sahamitr Pressure with a short position of United Paper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sahamitr Pressure and United Paper.

Diversification Opportunities for Sahamitr Pressure and United Paper

0.77

Correlation Coefficient

Sahamitr Pressure  United Paper

Poor diversification

The 3 months correlation between Sahamitr and United is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Sahamitr Pressure Container and United Paper Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Paper Public and Sahamitr Pressure is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Sahamitr Pressure Container are associated (or correlated) with United Paper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Paper Public has no effect on the direction of Sahamitr Pressure i.e., Sahamitr Pressure and United Paper go up and down completely randomly.

Pair Corralation between Sahamitr Pressure and United Paper

Assuming the 90 days trading horizon Sahamitr Pressure Container is expected to generate 0.51 times more return on investment than United Paper. However, Sahamitr Pressure Container is 1.96 times less risky than United Paper. It trades about 0.0 of its potential returns per unit of risk. United Paper Public is currently generating about -0.21 per unit of risk. If you would invest  935.00  in Sahamitr Pressure Container on October 26, 2024 and sell it today you would earn a total of  0.00  from holding Sahamitr Pressure Container or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Sahamitr Pressure Container  vs.  United Paper Public

Sahamitr Pressure

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sahamitr Pressure Container has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Sahamitr Pressure is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

United Paper Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days United Paper Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Sahamitr Pressure and United Paper

The main advantage of trading using opposite Sahamitr Pressure and United Paper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sahamitr Pressure position performs unexpectedly, United Paper can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in United Paper will offset losses from the drop in United Paper's long position.

The idea behind Sahamitr Pressure Container and United Paper Public pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.